Gov’t sweetens terms of PPP project

Bidding for Cebu airport expansion set on Nov. 15
/ 08:34 PM September 20, 2013

The Department of Transportation and Communications has set the bid submission for its first airport public private-partnership deal—the Mactan-Cebu International Airport—on Nov. 15 with revised terms to include a longer concession period and a lighter tax burden for bidders.

The DOTC earlier said the bid submissions would be held in October, after it postponed the original Aug. 28 auction as the concession agreement needed to be fine-tuned.


Such revisions, which resulted from lengthy discussions with the seven pre-qualified bidders, would still need to be approved by the National Economic and Development Authority (Neda) Board, the DOTC said in a bid bulletin issued Friday.

There were five revisions in all starting with lengthening the concession period from 20 years to 25 years and “transferring the liability for the payment of certain real property taxes to the government.”


Also covered was the “transfer of operations and maintenance of the aprons from grantors to the concessionaire,” including revenue rights and allowing flexibility in the implementation of augmentation capacity.

The DOTC also increased the duration of the period for prohibiting competing airports to 20 years or when passenger traffic at Mactan-Cebu hits 20 million passengers, whichever is later. It was previously set at 10 years or 15 million passengers.

The Mactan Cebu airport served 6.77 million passengers last year, which was already above its 4.5 million passenger capacity.

The P17.5-billion PPP deal is aimed at tapping private sector support to operate and rehabilitate the airport while expanding the facility through a new terminal that can handle eight million passengers a year.

“We have been working hard to find the balance between government and private sector interests. This gives sufficient time for the bidders to finalize their proposals,” a DOTC spokesman said in a separate statement. “Based on the active participation of all seven   pre-qualified groups in the one-on-one meetings, the transport agency anticipates that the bid proposals will be more competitive, resulting in better bid offers to the government.”

Earlier pre-qualified groups were MPIC-JGS Consortium, a venture between businessman Manuel Pangilinan’s Metro Pacific Investments and Gokongwei-led JG Summit Holdings; AAA Airport Partners, a venture between Ayala Corp. and Aboitiz Equity Ventures; Gotinanun-led Filinvest Development  Corp.; San Miguel Corp.; Lopez-led First Philippine Holdings; Henry Sy’s Premier Airport Group, and Megawide Construction Corp.

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TAGS: bidding, Business, Cebu airport, PPP projects
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